Marijuana board set for marathon meeting in Fairbanks

Cannabaska employees Zeek Overholser, Shayla Bewley, Kyle Jakubek and Manager Sarah Donnelly pause between customers on a busy Friday the warehouse structure on Tudor Road in Anchorage where the retail shop is operated in front and a cultivation facility is located in the back. (Photo/AJOC Naomi Klouda)

Advertising attempts keep tripping up owners of the newly established cannabis shops and resulting in violations, and when the Alaska Marijuana Control Board meets in Fairbanks July 12-14, it will be taking a look at how to streamline ad messages that can be sent to the public.

Owners cannot advertise health benefits of the bud or edibles; they can’t put prices next to products; and they can’t announce freebies. There has still been confusion, though, about what is legal.

“That’s part of the reason we’re looking at advertising and we’re trying to clarify some of the regulations and addendums,” said board chair Peter Mlynarik. “We’re hoping the extra time will give us time to work on regulation projects we haven’t been able to before.”

The three-day meeting will be the board’s longest since forming in 2015. It was a less expensive way to get an extra day’s work done than splitting into two meetings, Mlynarik said.

Meeting time has been dominated with approving new licenses. At May’s meeting, for example, no regulations could be taken up due to the high volume of license applications. This time, 41 license applications are on the agenda.

Among the 16 agenda items relating to regulations is an advertising matter on labeling and packaging that could “morph” into a broader discussion, Mlynarik said.

“It is hard to say succinctly” what is legal and illegal in advertising, he said. “That’s part of the reason we’re interested in looking at an advertisement project.”

So far, no one’s taken out a television ad and few try radio.

Enlighten Alaska owner Jane Stinson will be airing a brief spot on KNIK Radio, preapproved by attorney Jana Weltzin, who specializes in the new Alaska marijuana laws.

The 30-second spot was reviewed to make sure it carries the disclaimer required on all packaging and other regulations, Stinson said.

“Advertising is tricky for us. We mostly have social media, and word-of-mouth is our best advertisement,” she said.

No posters around town can announce sales or even talks about health and wellness associated with cannabis. Even pamphlets placed in offices are off limits as a way to get the word out.

In May, an operation was cited for alleged advertising violations. High Bush Buds of Soldotna reportedly put on its website the CBD strain Skunk Haze “is appreciated for its medicinal value.” Another strain carried this description: “enjoy Pineapple Fields throughout the day to elevate mood, curb depression and stimulate motivation.”

Those were illegal because they made “claims” about health, according to the citation.

Facebook took down several business sites’ pages in early July with no warning and no explanation. Anchorage’s Enlighten Alaska, Arctic Herbery, Alaska Fireweed and Dankorage and two Fairbanks businesses — Frozen Budz and Pakalolo Supply Co. —all lost their pages, presumably to “not meeting standards” expressed in Facebook policies.

“I did read about Facebook, and that didn’t have anything to do with our board,” Mlynarik said.

The Facebook takedowns were likely due to federal laws, under which marijuana is still illegal.

At the board meeting, two measures will look at advertising including labeling and packaging, and promotional activities.

Another agenda item considering whether to allow on-site consumption facilities, similar to how bars function, also is back on the agenda.

In Fairbanks, board member and marijuana license holder Brandon Emmett believes supply is an issue the board will be hearing about as it conducts the meeting there.

“The industry is off to a crawl because we are still seeing shortages, reduced hours, high prices,” Emmett said. “One of the goals stated at conception of (the board) was to start to diminish black market influence. We’ve done that to a small extent, but there’s too much room for black market competition.”

Shortages mean higher shop prices, Emmett said. Currently, it costs $65 for an eighth of an ounce and $75 for half grams of concentrates.

On the black market, it costs $35 to $50 for an eighth of an ounce and $40 per gram of concentrate, he said.

“As a board member and an industry representative, we need to get more businesses on line and capture the revenue, steal market share from the black market,” he said.

One sign of the shortage is measured in tax revenue, he said. Predictions of $14 million in taxes were made for the first six months of operations. Instead, less than $2 million has been raised statewide, Emmett noted.

“That’s a seventh of where we should be right now,” he said.

Among other agenda items:

• Handlers’ Permits: the proposals are two-fold. One would specify what criminal background convictions would prohibit an individual from obtaining a handler’s permit. The permit is necessary for all employees of a cannabis establishment, including cashier sales.

The second part of this project, as the board calls its resolutions, is to allow a more convenient transportation between license classifications. If adopted, the new regulation would read: Marijuana or marijuana product may only be transported to a licensed marijuana establishment by a licensee or an agent or employee of a licensee.

• Onsite Consumption Endorsement: Three proposals are up for consideration. The board can chose one of the proposals and amend it or put it out for public comment. Mlynarik’s proposal would permit establishments where eating cannabis products is okay but smoking is not. Board member Loren Jones’ proposal would limit the amount of time a person could spend in the establishment; smoking would be allowed, but there would be no entertainment sources such as television or pool tables. Emmett’s proposal would allow on-site consumption including smoking, and model regulations similar to bars.

• Definition of “direct or indirect financial interest” The board will consider proposals to exclude a person’s ability to receive rental charges based on a percentage of the marijuana facility’s earnings when the landlord is not a licensee. The current exemption has the potential to allow a landlord, who is not a licensee, to be in a position to exert influence on the facility’s operations in a manner that is expected to be limited to licensees.

• Local government regulation: The director of AMCO is required to give written notice of complete applications to “the local government with jurisdiction over the applicant’s proposed license.” This has been interpreted to be the most local form of government: the city. However, Title 29 of Alaska Statute grants planning and platting powers to the borough government, and with a few exceptions, that power is not delegated to city governments. The intention of the proposed draft is to allow the local government, whether it be city or borough, that has jurisdiction over a particular issue to be able to protest regarding that issue. For instance, a borough government may protest based on a land use issue but the city inside the borough may protest based on a tax issue.